MARINE & General Bhd (M&G) has sold its 40% stake in wholly owned M&G Sutera 8 Sdn Bhd (MGS8) to Muhibbah Engineering (M) Bhd for RM21.84 mil.
The disposal was to settle the remaining outstanding sum owed to Muhibbah Engineering for the construction of chemical tanker JM Sutera 8 (JMS8), M&G said in a bourse filing today.
M&G Marine Logistics Holdings Sdn Bhd had signed a subscription agreement with Muhibbah Engineering for the disposal. But M&G still owned a 60% equity interest in MGS8.
MGS8 is principally involved in the transport of freight overseas and coastal waters and other service activities incidental to water transportation.
“Pursuant to the disposal, the outstanding sum will be settled by way of Muhibbah Engineering’s subscription of the subscription shares and preference shares which will significantly reduce the utilisation of M&G’s funds as capital expenditure towards JMS8. Accordingly, the company will be free to deploy its internal funds towards future fleet expansion or other business opportunities as it arises,” said M&G.
By having Muhibbah Engineering participating in MGS8 as a shareholder, M&G said this would allow the company to gain a business partner with valuable expertise as an integrated solutions provider for maritime and oil and gas projects.
M&G’s wholly owned subsidiary M&G Marine Logistics (L) Pte Ltd on April 19, 2018 signed a contract with Muhibbah Marine Engineering Sdn Bhd, a wholly owned subsidiary of Muhibbah Engineering, to build a 7,000-deadweight tonnage chemical tanker for RM54.6 mil.
Subsequently, M&G paid part of the outstanding sum totalling RM32.76 mil to Muhibbah Engineering.
M&G’s shares closed unchanged at 8 sen while Muhibbah Engineering’s shares closed 0.56% higher at 90 sen. – July 21, 2020
